Continental Automotive Systems signs JV with RICO Auto

Continental Automotive Systems signs JV with RICO Auto

The international automotive supplier Continental AG, for its Automotive Systems Division, has signed a Joint Venture Agreement with RICO Auto Industries Limited, India to build a hydraulic brake systems plant in India in a two step approach generating sales of € 30 million (Rs 165 Crores) in a first phase. The joint venture will be a 50/50 partnership between the two companies. Continental Automotive Systems will have the management lead. The plant will begin mass production of hydraulic brake systems in 4th quarter of 2008, with employment of around 450 staff in Gurgaon near New Delhi.

When construction is completed in 2008, the plant will produce hydraulic brake products and services consisting of calipers for front and rear axles, drum brakes, master cylinders, brake boosters and load sensing proportioning valves for vehicles of all classes, and supplying to OEM customers in India. The planned annual production capacity is 1.0 million of brake actuation units and 2.0 million of brake calipers, 1.5 million drum brakes and 0.5 million load sensing proportioning valves.

On completion of 2nd phase the plant will have annual turnover of € 65 millions (Rs. 357.5 Crores) and would be employing 625 persons.

RICO, a US$ 250 million group is a well known name in the Indian automotive industry. With one of the biggest ferrous & aluminum casting & machining facilities in the country, RICO is one of the major suppliers of machined components and assemblies to Indian & global OEM’s.

“RICO is a well established auto component supplier in India, which will bring local market know-how to the JV”, said Mr. Heinz Zingel, Executive Vice President, Hydraulic Brake Systems and member of the Management Board of Continental Automotive Systems. “The new plant, designed according to world-class standards, will become the production base of our hydraulic braking products in India”.

“We are very pleased to have Continental as a partner in this venture. Continental being one of the leading technology provider & manufacturer of brake systems in the world would add significant value to the Indian Auto Component Industry through this Joint Venture. With our experience in casting & machining, along with Continental’s proven leadership in the braking systems, we complement each other very well”, said Mr. Arvind Kapur, Managing Director, RICO Auto.

“India plays a very important role in our growth strategy for Asia”, said Mr. Jay Kunkel, President Asia of Continental Automotive Systems and member of the Management Board. “As one of the market leaders in hydraulic brake technologies, we are committed to supplying our global and Indian customers with the best products, the best services and with uncompromising quality.”

“With its rapid growth during the past decade, India has indisputably become a key marketplace in the future development of the global automotive industry and we consider our new plant as our 1st step in our long term strategy for India” said Dr. Karl-Thomas Neumann, President of Continental Automotive Systems and Member of the Executive Board, Continental AG.

Continental Automotive Systems set up its presence in India in 2006 and recently started engineering activities in Bangalore.